But, as has been the case with word out of OPEC and related
sovereign oil producers in the last couple of years, markets are
bracing for a disappointment that would likely see global
production held near current levels. Levels, we'd note, which
have led to an oversupplied market and prices near multiyear
lows.

On Friday, West Texas Intermediate crude oil, the US benchmark
price, fell 2.7% to $40.40.

In a note to clients ahead of the report, Ed Morse at Citi wrote,
"The main unknown going into Sunday is what Saudi Arabia's
position will be. The world's largest petroleum exporter has been
silent about whether it attends and what position it stakes out."

We'll be watching.

In other oil news,
the latest US rig count showed that the total number of
rigs in use fell by three to 351, the lowest level in operation
since November 2009, while the combined oil and gas rig count
fell again to another record low.

US economy

Stop me if you've heard this before: It was another not-too-hot,
not-too-cold day in US economic data.

On Friday, we got two readings on the manufacturing sector and
another on consumer confidence. There was one beat and two
disappointments.

"The drop in the dollar, the slowing decline in oil sector capex
and, perhaps, signs of life in China's industrial sector, are all
helping to turn around U.S. manufacturing," wrote Pantheon
Macroeconomics' Ian Shepherdson in a note following this report.

However!

The Federal Reserve's
March reading on industrial production and factory use
crossed the tape about 45 minutes later and was a big
disappointment. Production fell 0.6% in March with use declining
to 74.8%. This drop was largely because of a 2.9% drop in
mining output, the biggest monthly loss since September 2008.

Following this data dump, Chris Rupkey at MUFG, who had been
generally bullish on the US economy and hawkish on Fed policy
over the last year or so, wrote a notably downbeat assessment of
the economy, saying that this data was clearly saying something
is wrong out there (emphasis added):

Net, net it is not too much of an exaggeration to say the sky is
falling when factory production is in retreat. The worldwide
slowdown in growth and the strong dollar has hurt American
exports and has led many factories to padlock the gates.
In many ways, this is exactly what a recession looks like
and the Federal Reserve will be increasingly alarmed about the
outlook for growth if this downward trend does not turnaround
quickly in the next few months.

Noted.

Technical analysis

Technical analysis sometimes gets a bad rap.

Really, it's just another way for investors to analyze markets,
as most of what technical analysis hopes to achieve is a
distilled reading on supply and demand: who wants to buy, who
wants to sell, who has the edge?

Of course, if we're talking about investors who are hoping to
work normal jobs and save money for retirement, then sure,
technical analysis is a bit silly. So, too, is fundamental
analysis. This is why there are financial planners you can hire
to do the work for you!

Anyway.

In a note out on Friday, J.C. O'Hara, chief market technician
at RBN Securities and one of the best technical whizzes around,
noted that what is an arcane shift in markets to the layperson
could be signaling a big — and bullish — shift in markets in the
coming weeks and months.

Here's J.C. (emphasis added):

We consulted the charts and found the majority of the time
when the S&P 500 traded for an extended period of time
without testing its Upper Volatility Band, the market had a Bear
or Sideways Trend. Bull Markets have a tendency to test the Upper
Volatility Band often.What we find very
interesting is how the market responds to the first close above
the Upper Bollinger Band after an extended period of time
below(we use 6 months as extended).The data concludes this positive volatility in price
movement is an early signal that the preceding Bear/Trendless
market is concluding and a new Bull/Uptrend market is
near.

Basically, the market began to push the upper edge of its recent
trend after a long time stuck in neutral. And this move could
signal better days ahead for stocks.

College

So this is a good reflection of the economy now —
the implication is that students going to work over going to
college is an indication that more opportunities exist for
less-skilled workers.

Or, as Bank of America wrote in a note to clients, "When
there is high unemployment, people will attend school given the
lack of job opportunities. In other words, the opportunity cost
of school declines during recession."

It's bullish.

On the same theme, earlier this week the team
at Bespoke
Investment Group wrote a great note about whether we've
reached "peak education."

The thesis here is that perhaps the trend from the tech
bust through the aftershocks of the Great Recession — mixed with
abundant government funding — led to a boom in higher education
as potential workers saw additional credentialing as the thing to
get them over the economic hump, while forces outside their
control weighed on employment prospects.

I think intuitively it seems like college is too expensive
and that it can't possibly make sense for every high-school
graduate to pursue additional education. "Peak" makes sense to
me.

But then you see the unemployment-rate breakdowns by
educational attainment that seems to suggest that no, this
intuition is very wrong, you should definitely go to
college.

Bespoke Investment Group

Then, however, there's a question of causality. Are
unemployment rates lower for college graduates because they
graduated from college or because the type of person who goes to
college is less likely to find themselves out of work for reasons
like being a general rule-follower, being afraid of standing
outside mainstream conventions, and thus comes off as an
attractive candidate on paper and in an interview, and so
on?